) recently announced a partnership with
) to roll out Windows Stores across the its 500 outlets in the
U.S. with an additional 100 in Canada. The terms of the deal were
The stores will feature Windows-based PCs, tablets, Windows
Phone, Xbox and various accessories. Unlike the
) stores at Best Buy, which are approximately 200 square feet,
the Windows Stores will be spread across1,500 to 2,200 square
feet and Microsoft will train1,200 sales associates.
Additionally, Microsoft will collaborate with Best Buy to open
an online version of its Windosw Store to provide customers with
updates on marketing campaigns. The new Windows Stores are
expected to be operational from June through September.
Microsoft has been dealing with plummeting sales of its
Windows 8 operating system. Though its new Windows 8 operating
system has sold more than 100 million copies since its launch
last October, both tablet and PC sales have been below the
According to IDC, 49.2 million tablets were shipped worldwide
in the first quarter of fiscal 2013. Apple led the market with a
39.6% share, having grown 65.3% from the first quarter of 2012,
followed by Samsung with a 17.9% share, Asustek with 5.5% and
Amazon with 3.7%. Microsoft is in fifth position with a mere 1.8%
Additionally, IDC estimated that
) Android and Apple's iOS operating systems together held
approximately 96.1% of total market share in the first quarter of
2013. But Microsoft's Windows and Windows RT operating systems
accounted for only 3.3% and 0.4% of market share,
Therefore, Microsoft is leaving no stone unturned to attain
incremental revenues, which is reflected in its strategic
initiative of opening 500 Windows Stores within Best Buy stores.
Earlier this year, the company said that it is transforming
several holiday stores into permanent Microsoft retail outlets,
which should further boost sales.
Best Buy, a consumer electronics retailer, has been working
with Apple for long and has a dedicated floor area for its
products. A few months back, Samsung announced a similar
three-year deal with Best Buy to open Samsung Experience shops
within its stores.
We believe that the platform provided by Best Buy would help
Microsoft to increase its sales. For Best Buy, the deal adds more
compelling products to its portfolio to better compete against
discount giants and online retailers like
Microsoft remains one of the best-positioned software vendors,
given the wide range of its products, emerging markets strength,
continued technology deployment at data centers and growth in
cloud computing. The company delivered better-than-expected
second quarter results with non-GAAP earnings up sequentially.
New products across segments, strength in the cloud computing
segment and share gains in search combined to generate
Microsoft has a Zacks Rank #3 (Hold). Another stock that has
been performing well and is worth considering is
), carrying a Zacks Rank #1 (Strong Buy).
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